We had a consultant that we paid a certain amount every other week. Due to financial strain we were unable to continue paying this amount and offered her a position as an employee at a lower rate. She declined and quit. She now wants us to pay a severance. What are our rights? There was no contract signed.
Answer
She quit and wants severance pay because she was a consultant? Consultants are self employed and as you stated there was no contract, she is not entitled to severance of any sort.
Answer
I see nothing in what you write to suggest that you have any obligation to pay any sort of severance. The only exception I can see would be if there was an enforceable oral promise of severance.
Answer
Was there ever a promise of employment for a certain time or to complete a job. You may want to ask her basis for a severance. It appears you are in the clear.
Answer
Your 'rights' are to hire and fire 'at will' unless there is a written contract of employment with the employee that specifies otherwise.
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